Assessing Universal Insurance Holdings, Inc.’s (NYSE:UVE) past track record of performance is a valuable exercise for investors. It enables us to reflect on whether the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess UVE’s recent performance announced on 31 March 2019 and evaluate these figures to its longer term trend and industry movements.
Check out our latest analysis for Universal Insurance Holdings
Did UVE perform better than its track record and industry?
UVE’s trailing twelve-month earnings (from 31 March 2019) of US$117m has increased by 1.2% compared to the previous year.
However, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 12%, indicating the rate at which UVE is growing has slowed down. What could be happening here? Well, let’s look at what’s going on with margins and if the entire industry is feeling the heat.
In terms of returns from investment, Universal Insurance Holdings has invested its equity funds well leading to a 22% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 6.9% exceeds the US Insurance industry of 2.5%, indicating Universal Insurance Holdings has used its assets more efficiently. However, its return on capital (ROC), which also accounts for Universal Insurance Holdingsâ€™s debt level, has declined over the past 3 years from 45% to 21%.
What does this mean?
Though Universal Insurance Holdings’s past data is helpful, it is only one aspect of my investment thesis. Positive growth and profitability are what investors like to see in a companyâ€™s track record, but how do we properly assess sustainability? I recommend you continue to research Universal Insurance Holdings to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for UVEâ€™s future growth? Take a look at our free research report of analyst consensus for UVEâ€™s outlook.
- Financial Health: Are UVEâ€™s operations financially sustainable? Balance sheets can be hard to analyze, which is why weâ€™ve done it for you. Check out our financial health checks here.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 31 March 2019. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.